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July 31, 2017
Procuring innovation in the back office
By: Mark Howard

We’ve been exploring what it means for the government back office to become a Center of Innovation—including how that might look for both financial and people management. In this post, let’s consider opportunities for procurement.

For the procurement function, becoming a Center of Innovation is about more than digitizing existing processes. It’s about fundamentally rethinking the way government acquires goods and services. That way, procurement can spend less time on administration and more energy on its true mission: seeking out, developing and managing relationships to continuously improve service delivery.

For IT projects, that likely requires a shift away from massive and highly detailed RFPs toward a procurement approach that can better accommodate changing needs. If you’re familiar with Agile, you know this methodology helps ensure strong, ongoing engagement between IT and the business. It delivers value in faster, smaller “bursts.” And it makes it possible to iterate as needs change or are better understood.

By nature, traditional procurement processes are very much at odds with that spirit of speed and flexibility. Designing new contracting vehicles—such as “transformation partnerships”—will make it possible for government teams to deliver more value on virtually any initiative, but particularly dynamic IT projects.

What are the opportunities beyond new ways of buying IT services? There are many ways that procurement can adopt techniques and technologies to build stronger relationships and support better results.

Last month I had the privilege of attending the 2017 Public Sector Summit at Harvard University, where a presentation by Sid Johnson got me thinking. Though Sid is now with the University of Georgia, he previously served as Commissioner of the Georgia Department of Administrative Services. His team there recently built a state-wide partnership with Amazon. As part of that effort, they implemented behavioral economics techniques to transform the way state employees purchase goods through the e-commerce giant.

“Behavioral economics” might sound complex. But Sid’s talk illustrated that these techniques—sometimes called “nudges”—can be simple yet powerful ways of improving decision making. With Amazon catalogs now integrated into Georgia’s procurement systems, state workers are making buying decisions amid a number of nudges. Among them: Curated category and product lists with multiple pop-up “warnings” that encourage optimal choices. Greater convenience and simplicity, with all statewide catalogs in a single session and taxes automatically removed. And faster, easier access to products from Georgia’s own small businesses. The Amazon partnership is also fueling long-term opportunities to delve into detailed spending data. That analysis will help in understanding spending patterns and assessing compliance (as well as finding ways to put more nudges to work!).

Procurement has a vital role to play as governments continue to change the “what” and “how” of public service delivery. And it must make changes large and small to ensure that the back office is moving agencies forward—not holding them back.

In the next few posts, I’ll be taking a closer look at some of the technologies that make it possible for functions throughout the government back office to spend less time on compliance and transaction processing and more time on their true missions. Until then, please keep sharing your comments, thoughts and suggestions here. To learn more about how to bring the back office to the forefront of government innovation, visit us here, and follow me on LinkedIn and Twitter.

See this post on LinkedIn: Procuring Innovation in the Back Office

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